While Intrade has betting markets on the US presidential election, they are unregulated and of questionable US legality. Nadex went through the expensive legal hoops to apply for permission to run a regulated market. Last week:
Hm... I get 1 vote of course, not 2. (well, as a foreigner, I get none, but you get the point...) Also, I don't see how my bet would influence my incentives. Let's say I have $100,000 riding on the election. Compare that to my influence on the election: nothing. The money in and of itself does not affect my voting incentives.
And since every bet for a candidate is matched with a bet against that candidate, whenever a betting market gives anyone a financial incentive to vote for a candidate, it at the same time gives someone else a financial incentive to vote against that candidate.
That's not really true. I could bet $1,000 on Romney while 2 people bet $500 each against Romney. But they each get 1 vote and I get 2 so assuming none of use would have cared earlier on, (I mean, the people most likely to find election betting markets interesting are those who have no idea who will win) that's 2 votes against Romney and 1 vote for Romney.
I should also add that it's unlikely for any individual bet to change the outcome of an election, even if it's very large. Such bets create arbitrage opportunities.
My wording was poor. I intended to say that no individual vote can influence an election. Hence, it would be very silly to change your one negligible vote in hopes of winning some money. Obviously masses of people can influence elections.
Are you kidding me? CDSs (which were so complex people are getting away with not paying their mortgage because the bank can't figure out which bank owns the house anymore) are a form of speculation. On a global scale a lot of the real estate market is based on speculation, it's the one bubble (driving up prices by keeping buildings empty is the oldest speculation trick in the book) that has always come back after a burst and it has been that way for centuries.
People in North Korea do not have access to information from outside and are not allowed to leave. In the U.S people are free to leave, you can access BBC or al Jazeera if you choose, and many people actually come from other countries to the U.S. So I don't think that's a good analogy at all.
Yes, central banks are supposed to cause inflation, but not loss of purchasing power. When shareholders, executives and captains of industry accumulate more and more money the central bank is there infuse more moeny into the system so that the aforementioned groups can keep their accumulated money while the workers get a pay raise. When banks use central bank money on speculation they are keeping money away from the workers.
If you want evidence that misinformation is effective in American politics I could give you a list of states that have enacted legislation based solely on righ-wing talk radio points, http://www.bluehampshire.co... (this is an entirely new, entirely manufactured issue with no grassroots involvement whatsoever, nobody cared about contraception a year ago). I can even proof these talking made their way to the supreme court. No, the Bush admin. never said Saddam caused 9/11, but they did say he funded Al-Qaeda (which was never proven) and forged evidence of a Iraqi nuclear programme, in addition there were a lot of think tanks and defense contractors who did get their people on tv to espouse all kinds of lies about Iraq (they're doing the same thing with Iran now, only difference is the current admin. doesn't agree with them). And no, it's not a good thing to have politicians who've never seen a science faculty up close, to make it look like evolution and climate change are just opinion.
Speaking about climate change, while the scientific evidence is getting stronger with the day, less Americans believe it's happening (the US are the only country on Earth where this happened). The US are also the only developed nation without single payer healthcare, this is the result of a hefty dose of propaganda. In any other country advocating against singlepayer healthcare means political suicide, but not in the US where people are indoctrinated against it by telling them that no matter how bad things are in the US, they're worse in other countries (the same way North Korea keeps its population from revolting over food shortages).
The whole reason for the Federal Reserve to lend money to banks is to cause "inflation" (Scott Sumner would say increase nominal GDP by increasing AD). It can be useful or not. And if the inputs to yachts are expensive, then building lots of yachts could bid up the prices of those inputs. Telling banks where the money should go is not really the job of the C.B, the whole point is to control aggregates. The standard way to do that is through open-market operations, though nowadays we are (stupidly) paying interest on excess reserves which makes the story a bit more complicated. Either way, gambling on elections doesn't seem significant for inflation, which the C.B will manage through its standard mechanisms.
You have a long list of complaints but provide little evidence that they are successful. People have attacked Obama, but he's still president and InTrade expects him to be re-elected. Corporate tax RATES in the U.S are highest in the world according to Greg Mankiw, revenue is paltry because the code is riddled with exemptions and credits. John Kerry did lose, but I think that could have been predicted by the economy alone. Eric Holder only discussed judicial vs "due" process recently so it's too soon to tell the effect, but all I heard about it was mockery.Funny anecdote about Iraq & 9/11: I remember the first thing I heard about it that very morning was a kid in my school talking about going to war with Iraq. That was before any organization even had time to respond to start pushing any narrative. Iraq was just the last major war we had and Saddam an easily remembered bad guy. I remember subsequently reading complaints about the Bush admin had tricked large numbers of poll-answerers into believing various things, even when nobody in the Bush admin had said such things. People will believe a lot of nonsense on their own. The children of atheists naturally assume animals come in platonic types which were presumably created for some teleological reason.
I would actually like to hear debate "about" evolution, contraception & every other interesting topic.
When a bank gets money from a central bank they are supposed to use it to invest in something useful, like a business building cars or solar panels or an airline. But, they can choose to use the money for speculation in oil, real estate, or betting on who the next US president will be. When they do so they inject money into the economy without increasing the number (or quality) of goods and services in the economy, hence they cause inflation. Now, of course this inflation may be reduced if the banks put a lot of their revenue into stuff ordinary citizens don't buy (like yachts), but then the rest of scoiety is at the mercy of bankers, the second the bankers start pouring the money into consumer goods or affordable homes ordinary citizens will be hit by inflation. If central banks have the ability to tell banks what they can spend money on then they certainly are not using that ability and haven't been for quite a while now.
On influencing election results through betting, I wrote my explanation in a reaction to Swimmy, above.
Also, you must be kidding when you suggest disinformation might not be effective in American elections... I mean, swiftboating, calling Obama a foreign muslim, fascist and communism at the samw time, inventing the stories about death panels, energy corporations that "donate" learning kits critical of climate change to schools, saying that the world will come to an end if America's poor get health insurance, saying that people in Britain and Canada have to wait years for surgery, having a "debate" about evolution and contraception in the 21st century, saying that drilling for oil in the US will noticeably affect the global price, saying that corporations are cash-strapped because of crushing taxes while effective taxes are at a historic low and corporate reserves and profits are at a historic high, saying that due process doesn't mean judicial process, saying that teacher's unions, not wars, tax cuts, ridiculous budgets for "homeland defense", getting 40% of Americans to mistakenly believe that Saddam was after 9/11, saying tax cuts for the rich and a dysfunctional healthcare system are the cause of the huge deficit, saying that elderly Dutch have to wear "do not euthanize me" bracelets, saying that Iran is capable of posing a threat to the United States military, saying that we don't have to be stewards for the Earth because the end times are near, saying that gay people and atheists belong in mental instutitions/prisons/graves...
These are just some of the horrifying acts of disinformation in American politics that have proven very successful over the years.
I don't understand the controversy. Per the second source Robin cites above: "The Dodd-Frank Act mandates that the agency ban event contracts tied to terrorism, war, gambling and other matters contrary to the public interest." Per the 1st source: "The CFTC determined that the contracts involve gaming ."
It's not about good or bad or right or wrong - it's about compliance with the existing law. I think in the end the CFTC is trying to stick with their mandate a lot more than they are trying to decide whether trading election futures is "good" or "bad."
Personally, I'd go further and say elections meet every one of the Frank-Dodd criteria. What is tied to terrorism, war, gambling and other matters contrary to the public interest more than politics?
Poelmo, FED is not properly written capitalized, because it is not an acronym. I think you should ask an economist how inflation (which does not necessarily cause a loss of purchasing power) works. The central bank has a lot of control over broad aggregates, the introduction of this particular market doesn't seem that relevant. And how does any entity, even one with a lot of wealth, cause a loss of speech for others merely from gambling on an outcome? dadalus2u below attempts to given an argument from altered incentives.
daedalus2u, what is the evidence that "disinformation is effective"? Compare how incumbents are expected to do based on the "bread & peace" poli-sci model to the actual result. Is it really so different? I don't think that model applies to open primaries, but you could also look at things like endorsements there.
You think speculation, and speculation with elections doesn't harm others? What planet have you been living on for the past 4 years? Maybe you should have a talk with the 27 million people in the Western world (and god knows how many more elsewhwere) who lost their job because of the current FINANCIAL crisis...
You're contradicting yourself. You said elections cannot be influenced but before that you said Santorum would withdraw if too many people betted against him. So obviously it's possible to influence elections: just have people bet against the electorate and you can get a candidate to quit even though that candidate would otherwise have won the election. You could ask why anyone would do that, why waste betting $10 million on someone who will probably lose? Well, a billionaire could order 100 of his employees to each bet $10 million against the electorate, forcing a popular candidate out of the race and increasing the chances of the billionaire's preferred candidate. The billionaire will then proceed to make back his $1 billion and then some because of policies enacted when his preferred candidate wins the election (of course in the US billionaires are already culling the candidate field before the first primary vote is cast...)
There's a reason every democratic country has elections countrywide as quickly as possible: they don't want voters to be inlfuenced by results from other regions, as this would give the regions voting first more of a say in government.
https://github.com/psztorc/...
Some clever kids are putting your LMSR market maker into a cryptocurrency like bitcoin. This will put it beyond the grasp of regulators.
Hm... I get 1 vote of course, not 2. (well, as a foreigner, I get none, but you get the point...) Also, I don't see how my bet would influence my incentives. Let's say I have $100,000 riding on the election. Compare that to my influence on the election: nothing. The money in and of itself does not affect my voting incentives.
And since every bet for a candidate is matched with a bet against that candidate, whenever a betting market gives anyone a financial incentive to vote for a candidate, it at the same time gives someone else a financial incentive to vote against that candidate.
That's not really true. I could bet $1,000 on Romney while 2 people bet $500 each against Romney. But they each get 1 vote and I get 2 so assuming none of use would have cared earlier on, (I mean, the people most likely to find election betting markets interesting are those who have no idea who will win) that's 2 votes against Romney and 1 vote for Romney.
I should also add that it's unlikely for any individual bet to change the outcome of an election, even if it's very large. Such bets create arbitrage opportunities.
My wording was poor. I intended to say that no individual vote can influence an election. Hence, it would be very silly to change your one negligible vote in hopes of winning some money. Obviously masses of people can influence elections.
Are you kidding me? CDSs (which were so complex people are getting away with not paying their mortgage because the bank can't figure out which bank owns the house anymore) are a form of speculation. On a global scale a lot of the real estate market is based on speculation, it's the one bubble (driving up prices by keeping buildings empty is the oldest speculation trick in the book) that has always come back after a burst and it has been that way for centuries.
The whole "fire in a crowded theatre" argument was used to justify jailing people who protested against WW1.
Do you have any evidence this was directly caused by speculation?
People in North Korea do not have access to information from outside and are not allowed to leave. In the U.S people are free to leave, you can access BBC or al Jazeera if you choose, and many people actually come from other countries to the U.S. So I don't think that's a good analogy at all.
@Wonks Anonymous
Yes, central banks are supposed to cause inflation, but not loss of purchasing power. When shareholders, executives and captains of industry accumulate more and more money the central bank is there infuse more moeny into the system so that the aforementioned groups can keep their accumulated money while the workers get a pay raise. When banks use central bank money on speculation they are keeping money away from the workers.
If you want evidence that misinformation is effective in American politics I could give you a list of states that have enacted legislation based solely on righ-wing talk radio points, http://www.bluehampshire.co... (this is an entirely new, entirely manufactured issue with no grassroots involvement whatsoever, nobody cared about contraception a year ago). I can even proof these talking made their way to the supreme court. No, the Bush admin. never said Saddam caused 9/11, but they did say he funded Al-Qaeda (which was never proven) and forged evidence of a Iraqi nuclear programme, in addition there were a lot of think tanks and defense contractors who did get their people on tv to espouse all kinds of lies about Iraq (they're doing the same thing with Iran now, only difference is the current admin. doesn't agree with them). And no, it's not a good thing to have politicians who've never seen a science faculty up close, to make it look like evolution and climate change are just opinion.
Speaking about climate change, while the scientific evidence is getting stronger with the day, less Americans believe it's happening (the US are the only country on Earth where this happened). The US are also the only developed nation without single payer healthcare, this is the result of a hefty dose of propaganda. In any other country advocating against singlepayer healthcare means political suicide, but not in the US where people are indoctrinated against it by telling them that no matter how bad things are in the US, they're worse in other countries (the same way North Korea keeps its population from revolting over food shortages).
The whole reason for the Federal Reserve to lend money to banks is to cause "inflation" (Scott Sumner would say increase nominal GDP by increasing AD). It can be useful or not. And if the inputs to yachts are expensive, then building lots of yachts could bid up the prices of those inputs. Telling banks where the money should go is not really the job of the C.B, the whole point is to control aggregates. The standard way to do that is through open-market operations, though nowadays we are (stupidly) paying interest on excess reserves which makes the story a bit more complicated. Either way, gambling on elections doesn't seem significant for inflation, which the C.B will manage through its standard mechanisms.
You have a long list of complaints but provide little evidence that they are successful. People have attacked Obama, but he's still president and InTrade expects him to be re-elected. Corporate tax RATES in the U.S are highest in the world according to Greg Mankiw, revenue is paltry because the code is riddled with exemptions and credits. John Kerry did lose, but I think that could have been predicted by the economy alone. Eric Holder only discussed judicial vs "due" process recently so it's too soon to tell the effect, but all I heard about it was mockery.Funny anecdote about Iraq & 9/11: I remember the first thing I heard about it that very morning was a kid in my school talking about going to war with Iraq. That was before any organization even had time to respond to start pushing any narrative. Iraq was just the last major war we had and Saddam an easily remembered bad guy. I remember subsequently reading complaints about the Bush admin had tricked large numbers of poll-answerers into believing various things, even when nobody in the Bush admin had said such things. People will believe a lot of nonsense on their own. The children of atheists naturally assume animals come in platonic types which were presumably created for some teleological reason.
I would actually like to hear debate "about" evolution, contraception & every other interesting topic.
When a bank gets money from a central bank they are supposed to use it to invest in something useful, like a business building cars or solar panels or an airline. But, they can choose to use the money for speculation in oil, real estate, or betting on who the next US president will be. When they do so they inject money into the economy without increasing the number (or quality) of goods and services in the economy, hence they cause inflation. Now, of course this inflation may be reduced if the banks put a lot of their revenue into stuff ordinary citizens don't buy (like yachts), but then the rest of scoiety is at the mercy of bankers, the second the bankers start pouring the money into consumer goods or affordable homes ordinary citizens will be hit by inflation. If central banks have the ability to tell banks what they can spend money on then they certainly are not using that ability and haven't been for quite a while now.
On influencing election results through betting, I wrote my explanation in a reaction to Swimmy, above.
Also, you must be kidding when you suggest disinformation might not be effective in American elections... I mean, swiftboating, calling Obama a foreign muslim, fascist and communism at the samw time, inventing the stories about death panels, energy corporations that "donate" learning kits critical of climate change to schools, saying that the world will come to an end if America's poor get health insurance, saying that people in Britain and Canada have to wait years for surgery, having a "debate" about evolution and contraception in the 21st century, saying that drilling for oil in the US will noticeably affect the global price, saying that corporations are cash-strapped because of crushing taxes while effective taxes are at a historic low and corporate reserves and profits are at a historic high, saying that due process doesn't mean judicial process, saying that teacher's unions, not wars, tax cuts, ridiculous budgets for "homeland defense", getting 40% of Americans to mistakenly believe that Saddam was after 9/11, saying tax cuts for the rich and a dysfunctional healthcare system are the cause of the huge deficit, saying that elderly Dutch have to wear "do not euthanize me" bracelets, saying that Iran is capable of posing a threat to the United States military, saying that we don't have to be stewards for the Earth because the end times are near, saying that gay people and atheists belong in mental instutitions/prisons/graves...
These are just some of the horrifying acts of disinformation in American politics that have proven very successful over the years.
I don't understand the controversy. Per the second source Robin cites above: "The Dodd-Frank Act mandates that the agency ban event contracts tied to terrorism, war, gambling and other matters contrary to the public interest." Per the 1st source: "The CFTC determined that the contracts involve gaming ."
It's not about good or bad or right or wrong - it's about compliance with the existing law. I think in the end the CFTC is trying to stick with their mandate a lot more than they are trying to decide whether trading election futures is "good" or "bad."
Personally, I'd go further and say elections meet every one of the Frank-Dodd criteria. What is tied to terrorism, war, gambling and other matters contrary to the public interest more than politics?
Poelmo, FED is not properly written capitalized, because it is not an acronym. I think you should ask an economist how inflation (which does not necessarily cause a loss of purchasing power) works. The central bank has a lot of control over broad aggregates, the introduction of this particular market doesn't seem that relevant. And how does any entity, even one with a lot of wealth, cause a loss of speech for others merely from gambling on an outcome? dadalus2u below attempts to given an argument from altered incentives.
daedalus2u, what is the evidence that "disinformation is effective"? Compare how incumbents are expected to do based on the "bread & peace" poli-sci model to the actual result. Is it really so different? I don't think that model applies to open primaries, but you could also look at things like endorsements there.
@Don Geddis
You think speculation, and speculation with elections doesn't harm others? What planet have you been living on for the past 4 years? Maybe you should have a talk with the 27 million people in the Western world (and god knows how many more elsewhwere) who lost their job because of the current FINANCIAL crisis...
You're contradicting yourself. You said elections cannot be influenced but before that you said Santorum would withdraw if too many people betted against him. So obviously it's possible to influence elections: just have people bet against the electorate and you can get a candidate to quit even though that candidate would otherwise have won the election. You could ask why anyone would do that, why waste betting $10 million on someone who will probably lose? Well, a billionaire could order 100 of his employees to each bet $10 million against the electorate, forcing a popular candidate out of the race and increasing the chances of the billionaire's preferred candidate. The billionaire will then proceed to make back his $1 billion and then some because of policies enacted when his preferred candidate wins the election (of course in the US billionaires are already culling the candidate field before the first primary vote is cast...)
There's a reason every democratic country has elections countrywide as quickly as possible: they don't want voters to be inlfuenced by results from other regions, as this would give the regions voting first more of a say in government.